"The comfort of the rich depends on an abundance of the poor." ~ Voltaire
"If any man tells you he loves America, yet hates Labor, he is a liar." ~ Abraham Lincoln

Thursday, May 30, 2013

The Good & The Bad Of Our Infrastructure

There has been a lot of talk about infrastructure amongst politicians, pundits, economic developers, etc. as a needed path toward revitalization. Different groups analyzing America's infrastructure have given poor grades to the quality of our bridges, electricity and water infrastructure.

Maybe it's going too far to say, "The U.S. is doing just fine, thank you very much." The nation would benefit from reordering its infrastructure priorities -- away from new highways, for example, where we are already overbuilt and usage is falling for the first extended period on record. And we'd do well to take advantage of low interest rates and idle construction resources to knock out all of our future infrastructure needs.

But the idea that the U.S. has an infrastructure crisis? No. A broad, permanent increase in spending is unwarranted...

Between 2001 and 2011, annual public investment averaged 3.3 percent of gross domestic product, according to the Organization for Economic Cooperation and Development. The average OECD nation spent 3 percent of GDP over the same period...

Total public construction spending has varied between 1.7 percent and 2.3 percent of GDP for the last 20 years, according to the U.S. Census Bureau. By the Congressional Budget Office's slightly different measure, infrastructure spending has been between 2.3 percent and 3.1 percent of GDP since 1956...

Believe it or not, infrastructure has improved significantly over the last two decades. In its report for 2010, the Federal Highway Administration said that 57 percent of all vehicle-miles were traveled on federal highways with ratings of "good" or higher -- according to a measure of road quality pleasingly known as the International Roughness Index. That was up from 48 percent in 2000. The percentage of roads in bad condition has also declined: In 1989 6.6 percent of rural and urban interstates were rated "poor"; now only 1.9 percent of rural interstates and 5.4 percent of urban ones earn that grade.

Despite warnings from President Barack Obama, America's bridges have never been safer. The highway administration rated 21.9 percent of its bridges "deficient" in 2009, as compared to 37.8 percent in 1989. And contrary to Obama's implication, the word "deficient" does not mean unsafe, at least as the highway administration uses it. A bridge is "deficient" when it would benefit from expansion and renovation in line with usage.

Traffic congestion has diminished. In 1989, 52.6 percent of urban interstates were rated "congested" according to a comparison of peak volume to planned capacity. In 2009, the figure was 26.3 percent.

So how can we have, as Soltas claims, steady infrastructure spending and improvements alongside others claiming failing grades for much of our infrastructure?

In 2010, 57 percent of all vehicle-miles may have been traveled on federal highways with ratings of good or higher, compared with 2000, but it could be that federal highways have been getting the bulk of infrastructure dollars. Regardless, a 9 percentage point improvement is still laudable. Yet, if this is where a majority of our infrastructure dollars were spent, we would expect to see an improvement.

Are population changes (primarily people moving), between 1989 to 2009, responsible for the decrease shown in traffic congestion? Because more people are living in certain mega-regions, does it follow that the areas which have lost population would have less congestion? Information concerning migration and commute times could help flesh this metric out.

Do we just need to re-prioritize how our infrastructure money is spent?

Jason Sattier has found that infrastructure spending is actually declining.

“In 2012, the Federal Highway Administration said 67,000 — 11 percent — of the nation’s 607,000 bridges were structurally deficient,” USA Today‘s Marisol Bello reports. “That means the bridges are not unsafe but must be closely monitored and inspected or repaired.”

The chart above from Business Insider‘s Joe Weisenthal illustrates just how little money the federal government is spending on public construction. Despite this, proposals like an infrastructure bank can’t even get a vote in the House of Representatives.

The American Society of Civil Engineers 2013 Report Card gave our infrastructure a grade of D+. They estimate the U.S. needs $3.3 trillion in infrastructure investment by 2020. They estimate Wisconsin has 1,157 structurally deficient bridges, 71% of roads are of poor or mediocre quality, $6.2 billion is needed for drinking water and $6.4 billion is needed for wastewater. Almost 14% of Wisconsin bridges are either functionally obsolete or structurally deficient.

John Diehm and Katy Hall provide a graphic of bridge collapses across the country:

The Times reports that, according to federal records, the bridge in question has a sufficiency rating of 57.4 out of 100, which is well below the state average of 80. Yet 759 other bridges have even worse marks.

Lydia Mulvany reported, "Seven Wisconsin highways built in the last 20 years are underused, raising questions about the more than a billion dollars they cost taxpayers, according to a report the WISPIRG Foundation released Thursday...The state still is spending billions on highways while cutting funding for local roads and other forms of transportation, the report said. The 2011-2013 biennial budget appropriated $1.2 billion for highway construction projects, and Gov. Scott Walker's current budget proposal includes more than $3 billion in highway spending."

It appears, across the country, certain infrastructure is getting the bulk of spending (highways and more recently rail), whilst the neediest infrastructure goes without.

Total federal clean-technology spending, by year (billions), 2009–2014

Our infrastructure is actually getting better in some areas. For the first time in 15 years, the grade for U.S. infrastructure rose, from a D to a D+. And six areas have seen improvement since 2009, including roads, bridges, rail, drinking water, solid waste disposal and wastewater treatment. Two big examples:

1) U.S. rail is getting better: Rail in particular has seen some big upgrades in the past few years, partly thanks to stimulus money but largely due to private investment: “In 2010 alone,” the report notes, “freight railroads renewed the rails on more than 3,100 miles of railroad track, equivalent to going coast to coast. Since 2009, capital investment from both freight and passenger railroads has exceeded $75 billion.”

2) So are our roads: America’s roads have also become sturdier in recent years, thanks to an uptick in federal stimulus spending as well as increased investments from states and the rise of private-public partnerships — overall investments have now increased to $91 billion per year.

We are taking care of certain infrastructure (highways), it seems. Yet we are obviously neglecting other areas (water, electricity). The findings appear to indicate that merely diverting some of the funding for new/repaired highways and roads toward other infrastructure needs could go along way in helping address some of our most pressing infrastructure projects.